Expansion is a good thing!
A common goal for many agents is to build a profitable farm by scaling up and expanding. However, many get blinded by the idea of expansion without understanding how to or when to best do it. The excitement of expanding their farm can really cloud their judgment. As a result, a lot of agents think they should grow as quickly as possible to get more deals. They think this will mean they will make more money and get more market share. They don’t even know if the are ready to expand their farm.
This is a BIG mistake for most. I can speak from experience when I say that the majority of agents haven’t mastered the skills needed to expand after farming for only 6-12 months. And they usually don’t have the systems in place to achieve the success they are after either. Expanding too quickly is like trying to go from getting your learners permit to jumping into a Formula One racing car. You have to work your way up to it.
Sure, it seems exciting, and you may be able to handle some of the growth, but without understanding the fundamentals, or having enough sales in the pipeline to justify the expansion just yet, you can end up hurting your business more than help it.
So when should you be focused on expanding? There is no standard answer, as each person is going to have their own pace and skill set, but there are a few key things we should be looking for.
Are You Ready To Expand Your Farm?
One of the easiest to track is the consistency of your deals. Are you consistently bringing in enough leads to close enough sales regularly? If not, you probably aren’t ready to scale up.
Are you able to track a return on your marketing spend consistently? Can you say with certainty that if you spend X dollars, you can expect a Y return? If you can’t you probably aren’t ready to scale up.
Your farm should fund itself. The purpose of your business is to generate profit. You have to pay yourself AND your business. So you must ensure your farm can sustain itself. If you aren’t making enough money from your current farm to reinvest into another, than you probably shouldn’t scale up.
Can you track where your leads came from and confirm that spending more money or time on those lead sources will result in a higher return? Many agents hit a point of diminishing returns for many of their lead gen strategies, so you want to make sure if you scale up it will work. If you don’t know if you’ve hit your limit, you may not be ready to scale up.
If you haven’t figured out the little kinks in your systems, like your follow up plans, marketing pieces, conversion systems etc., you may not be ready to scale up.
You may be tempted to try and generate more leads, but aren’t converting the ones you have efficiently and could be leaving a lot on the table. If you don’t know your conversion rates or haven’t increased your current conversion rates, you may not be ready to scale up.
Don’t Expand Your Farm Too Soon!
There are a number of other factors that come into play when deciding to scale up, but the key is to start by really understanding your input vs your output into your business. Throwing more money or time at new strategies doesn’t bode well, if you haven’t been efficiently using your resources already.
I can’t sit here and tell you if you are ready to expand. But I can tell you that more often than not, there is a lot more work to put into what you already have BEFORE trying to expand into another farm or try and take over more market share. Ultimately, the decision is yours to make. I’m sure you will make the right decision for your business, but I always advise agents slow down and look for more opportunities that are already in front of them, rather than try and create more from scratch. You’d be surprised at how much business is ripe for the taking already.
Don’t miss out on it by expanding too soon!
Happy Farming!
Ryan Smith – Founder/Creator
Launch Your Farm
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